Pennsylvania Attorney General Josh Shapiro announced that his office secured $5.3 million in debt relief for former ITT Tech students in the state.
The amount obtained by the Pennsylvania Attorney General was part of a settlement between the bipartisan coalition of 44 Attorneys General and the Student Connect CUSO, LLC (CUSO), the holder and manager of private loans for students at ITT Tech.
CUSO agreed to pay more than $168 million in debt relief for more than 18,000 former ITT Tech students across the United States. In Pennsylvania, 570 former ITT Tech students are qualified for debt relief.
Under the settlement, CUSO is required to notify all students with outstanding loans that their debts have been cancelled.
CUSO also settled a related complaint filed by the Consumer Financial Protection Bureau (CFPB) under the same terms.
The settlement holds CUSO accountable for engaging in abusive and deceptive lending practices for ITT Tech, which is now defunct.
In a statement, AG Shapiro said ITT Tech took advantage of thousands of hardworking students who want to complete their education. He emphasized that the school “aggressively pressured students to take predatory loan options and deceived them about the conditions of their loans.”
Additionally, AG Shapiro said many Pennsylvania students were burdened with student loan debt and struggled to find jobs because of ITT Tech.
“I will hold accountable any student loan company or for-profit college that preys on the students they are technically supposed to help,” said AG Shapiro.
Complaint against CUSO, ITT Tech
In their complaint, the Attorneys General alleged that CUSO was aware that ITT Tech offered students Temporary Credit (TC) upon enrollment to cover the gap in tuition between federal student aid and the full cost of the education. Students were supposed to pay the TC before the next academic year. However, many students complained because they thought the TC was similar to a federal loan and would not be due until six months after their graduation.
ITT Tech allegedly pressured and coerced students into accepting the CUSO loans when the TC became due. Many students complained that those loans carried high interest rates, far above the rates for federal loans.
The school allegedly pulled students out of class and threatened to expel them if they refused to accept the terms of the loans. Most students were forced to accept the CUSO loans because ITT credits are not transferrable to other schools.